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Gold edges up backed by tensions on the G7 summit
On Monday, gold went up in the face of a weakening evergreen buck after Donald Trump had made up his mind to withdraw his signature under the joint communiqué of the G-7 summit ahead of his meeting with North Korean dictator Kim Jong-no. Moreover, this week there will be a gathering of the Federal Reserve on monetary policy.
Gold rallied 0.05% on the Comex exchange being worth $1303.2 an ounce.
Moreover, the US dollar index, normally reflecting the strength of the American currency versus a bunch of six currencies, went down 0.09% reaching 93.47.
The greenback dived after US leader had departed from the G7 summit being held in Canada over the weekend. Then he posted on Twitter that he decided to recall his signature under a joint communiqué and heavily criticized Canada’s Prime Minister Justin Trudeau.
Trump told that Canada’s Prime Minister of Canada Justin Trudeau turned out to be soft during their meetings at the G7 summit to make a press conference after his departure and to label American duties as insulting. Donald added that he wouldn’t stand being pushed around. Trump considers it to be an extremely weak and dishonest move. US leader stressed that American duties should be regarded as the answer to the striking 270% tariff on American dairy products.
Assets, denominated in US dollars, happen to be sensitive to the dynamics of the evergreen buck. When the US currency ascends gold becomes more costly for those who hold foreign currency. Therefore, it cuts the overall demand for this non-ferrous commodity.
On Sunday, US leader came to Singapore, where he’s expected to meet with North Korean dictator Kim Jong-no on Tuesday.
In addition to this, it’s anticipated that the key US financial institution will have the interest rate lifted for the second time in 2018 at a gathering on Wednesday.
Canada’s retail sales will be out on October 21 at 15:30 MT time. Get ready with us for this event!
The market is resilient ahead of the speeches of Fed’s Powell and ECB President Lagarde, but there are still interesting movements.
The uncertainty over US fiscal stimulus and Brexit, and also rising new virus cases deteriorated the market mood. That’s why we can expect the further rally of the US dollar and the fall of riskier assets today.